Bulgaria's new factories for 2024: How has the industrial landscape changed

Капитал

Bulgaria's new factories for 2024: How has the industrial landscape changed

Amongst a sharp dip in investments during 2024 there have been a few that have also withdrawn entirely from the country

Капитал

© Капитал


Foreign investment in Bulgaria dropped by 65% in the first ten months of 2024, according to data from the Bulgarian National Bank, reaching only 1.24 billion euro. This happened against the backdrop of already weak investment activity in the previous 2023. Therefore, it is not surprising that the 15 largest announced new production projects, which Capital traditionally follows, have also shrunk to just over 1 billion levs.

In comparison, in the previous year, planned investments totaled an impressive 4.4 billion levs, although half of the amount came from the plans of the Belgian ABEE to build three bases in Bulgaria for recycling and production of batteries for electric vehicles - a project that has yet to materialize, if it starts at all.

Behind the poor results in 2024 are probably objective explanations such as the fluctuating economy in Europe, which is the main market for a large part of Bulgarian enterprises, and the unstable political environment, which is definitely not helping investor confidence.

The overall picture of announced projects shows that two-thirds are from established manufacturing companies in the country and are related to expanding capacity at their current bases or at other locations. New investors are few, although among them is the leader in the ranking - the Turkish Smart Solar Technology.

Turkish companies had the strongest presence among foreign investors last year. Bulgarian ones, on the other hand, accounted for exactly one third of the announced projects. The traditionally strong German industry performed poorly last year, which is probably due to the problems of the German economy itself. Only 5 out of 15 are projects in Northern Bulgaria, as the South continues to win employers with its far more developed infrastructure and business opportunities.

The good news is that two of the companies that announced projects a year ago have decided to expand their investments in 2024. Among them is the 5-year program of the copper mining company Aurubis, which increased its outlay from 166 million euros to 400 million euros, adding more projects at its plant in Pirdop. With the installation of additional equipment, the investment of the German manufacturer of automation solutions Festo has also more than doubled, and is now estimated at 80 million levs.

However, the past year also brought a phenomenon not seen for a long time - factory closures. After the German Leoni announced in mid-2024 that it was ceasing production of automotive cables in Pleven, similar news came from the Japanese SE Bordnetze - Bulgaria. As of this year, it has stopped the production of cables in Mezdra, and the plant in Karnobat is limiting its capacity. After a major fire at the plant in Stamboliyski, the British paper manufacturer Mondi also decided not to restore capacity and to cease production in the country.

1. Sun over Thrace

Sector: Photovoltaics

Company: Smart Solar Technologies

Location: Stara Zagora

Investment: 240 million levs

New jobs: 812

The Turkish Smart Solar Technologies plans to build a plant for solar cells and panels in the village of Enino near Stara Zagora. The project was certified as a priority and will be eligible for state aid. The company was registered in April 2023 in Sofia, and is owned by the Turkish Smart Gunes Enerjisi Teknolojileri of Halil Demirdag, who has Bulgarian citizenship. According to information on the Smart Solar Technologies website, the production of solar panels is expected to begin by the end of 2025, and that of solar cells - in 2026. The production will be intended for export to European markets - Germany, Italy, the Netherlands and Austria.

2. Growth with the customer

Sector: Technical gases

Company: Air Liquide Bulgaria

Location: Pirdop

Investment: 196 million levs (EUR 100 million) total in Bulgaria and Germany

New jobs: 0

French technical gas producer Air Liquide will invest a total of 100 million euro by 2027 in facilities at Aurubis' sites in Pirdop and Hamburg. The bulk of the funds are earmarked for Bulgaria, where Air Liquide will build a completely new air separation plant and produce gases such as oxygen, nitrogen and argon, while existing facilities in Germany will be renovated. The projects are the result of the extension of gas supply contracts with the main customer and the ongoing expansion of copper production in Pirdop. The new installations will also support the development of sales to smaller customers (so-called trade markets) in both regions.

3. From production to processing

Sector: Food industry

Company: Agria Group Holding

Location: Popovo

Investment: 147 million levs (75 million euros)

New jobs: n/a

Agricultural producer and trader Agria Group Holding is also actively entering the processing of sunflower seeds. The company will build a new crude oil plant in Popovo, which is expected to be completed by 2027, but could start operating as early as 2026. The plant will have a processing capacity of 250-300 thousand tons of sunflower seeds per year, and over 90% of the production will be for export. The main reason for choosing Popovo is that the company has its own grain base, infrastructure and terrain there. The group already owns one crude oil plant - Kehlibar in Lyaskovets, which processes 45-50 thousand tons per year and which will continue to operate in parallel with the new one.

4. More chocolate

Sector: Food industry

Company: Mondelēz

Location: Svoge

Investment: 75 million levs (40 million dollars)

New jobs: n/a

The American Mondelēz International will invest in a new production line for molding chocolate tablets. The project at the Svoge factory is expected to be completed within two years. The expansion comes after a successful 2023, in which the company recorded a 15% increase in production or 34 thousand tons of chocolate products. The investment is significant because it is equal to half of all that the international chain has made in the country over the last 10 years. Together with the new assembly line, the company has earmarked approximately 3 million levs for the digitalization of the entire business.

5. New location

Sector: Weapons production

Company: Arsenal

Location: Stara Zagora

Investment: 60 million levs

New jobs: 300

The Kazanlak arms manufacturer Arsenal has opened a new factory in Stara Zagora. The initial investment in it is 40 million levs, but the purchase of equipment continues, and by the end of 2024 the amount was expected to be around 60 million levs. The enterprise is planned to be highly robotized and to produce parts for the Kazanlak plant. The company also has a production base in Maglizh. Of the planned 300 jobs in Stara Zagora, 70 people have already been employed. In recent years, the arms business as a whole has been flourishing, and Arsenal is the largest company in the sector. For 2023, it reported a 25% growth in total revenues to 989.5 million levs. Arsenal directly employed over 9,100 people as of October last year, according to APIS data.

6. New packaging

Sector: Packaging production

Company: Tri-Wall Bulgaria

Location: Plovdiv

Investment: 70 million levs

New jobs: 250-300

Hong Kong-based international group Tri-Wall announced at the end of last year that it would build a paper packaging plant near Plovdiv, with the investment expected to exceed 60 million levs. In mid-2023, the local company Tri-Wall Bulgaria, whose managers are Turkish citizens, was registered. Last fall, the company increased its capital to 22.5 million levs and bought a 56-acre plot of land in the Trakia economic zone. The plant is currently at the design stage, with production expected to begin in 2026. The group is developing business in Asia, Europe and North America.

7. Glass Expansion

Sector: Glass Manufacturing

Company: Trakia Glas Bulgaria

Location: Targovishte

Investment: 56 million levs (30 million dollars)

New Jobs: n/a

Turkish group Sisecam will invest 30 million dollars in a new glass production line at its Trakia Glas Bulgaria company in Targovishte, with the project expected to be operational this year. This brings Sisecam's total investments in Bulgaria to an impressive 925 million dollars. The new line will have a capacity of 6 million sq m per year and will be the second such line at the plant - the first was launched in 2013 and produces both standard coated glass for residential buildings and tempered glass, which has a higher added value and is used for commercial buildings. For 2023, Trakia Glas Bulgaria's revenues are down 23% to 344.3 million levs and the company reported a loss of 16.9 million levs.

8. Energy Business

Sector: Transformer substation manufacturing

Company: Smart Power Grid

Location: Plovdiv

Investment: 50 million levs

New jobs: 150

Established in 2021, Smart Power Grid, which manufactures transformer substations and medium-voltage switchgear in rented premises in Plovdiv, will build its own new base elsewhere near the city. The 50 million levs investment is being financed by the company's new majority owner - Premium Invest Property, which belongs to the family of Krassimir Georgiev, better known as Krasyo the Black. The funds will be invested in two stages - the first 30 million levs will be in a transformer substation factory, and another 20 million levs is earmarked for expanding production to include transformers. This will allow the company to close the production cycle. In 2023 Smart Power Grid increased its turnover to 29 million levs and reported a profit of 1.9 million levs.

9. To get ahead of the market

Sector: Mechanical Engineering

Company: M+S Hydraulics

Location: Kazanlak

Investment: 45 million levs

New jobs: 120

Kazanlak-based hydraulic systems manufacturer M+S Hydraulics has announced an ambitious project to build a second plant in the city, which will increase its capacity for hydraulic motors by 30%. The plan is to complete it within three years, and M+S Hydraulics plans to have the new facility highly automated. The project began despite the company's weaker sales last year as a result of the economic slowdown in Europe. For the first 9 months of 2024, revenues decreased by 43% to 110.1 million levs. The intention is to use this period for construction, so that when the markets recover, the company will have more capacity.

10. Clean Business

Sector: Hygiene Products Manufacturing

Company: Septona Bulgaria

Location: Ruse

Investment: 40 million levs

New jobs: 150

The Greek Septona will invest 40 million levs in the expansion of its production base in Ruse. The project is divided into two stages, with the first worth about 26 million levs and including construction activities and the purchase of a cotton production line. The second stage is for about 14 million levs and envisages expanding production with new machines for the company's other range of products such as shower gels, soaps, disinfectants, etc. The new base is expected to be operational in the second half of 2025. With the first stage, the company plans to increase the number of employees by 50 people, and then, depending on the market situation, it is expected to add about 100 more people over the next two years.

11. German Substitution

Sector: Automotive Industry

Company: Kaiser Automotive Systems Bulgaria

Location: Pleven

Investment: 19.6 million levs (10 million euro)

New jobs: 500

The German Kayser Automotive Systems plans to invest 10 million euro over the next five years in the production of automotive components in Pleven. Through its local company Kaiser Automotive Systems Bulgaria, it rented the former building of another German company - Electrokabel, which ceased operations a few years ago, and last summer began production of various pipe systems (including plastic tanks, valves, etc.) for cars, transferring part of its activities to Poland. With the installation of new equipment in the coming years, production is expected to expand, and the number of employees to reach 500.

12. Chinese Profile

Sector: Automotive Industry

Company: Zies Europe

Location: Plovdiv

Investment: 18.7 million levs

New jobs: 101

The Chinese Shanghai Unison Aluminium Products has begun construction of a plant for aluminum automotive components near Plovdiv. The project is by the local company Zies Europe, and the contractor for the construction activities is Sienit Holding. The enterprise will be located on nearly 13 thousand sq. m of built-up area, including production and warehouses. The plant will produce aluminum profiles and parts for the automotive industry, and the process will include extrusion of blanks and subsequent processing of the products. Different numbers were quoted as the size of the investment, but according to the Class A investor certificate that the company received, the amount will be 18.7 million levs.

13. Group player

Sector: Mechanical engineering

Company: Sar Makina Bulgaria

Location: Shumen

Investment: 16 million levs

New jobs: 37

The Turkish company Sar Makina Bulgaria received a certificate for an investment of 16 million levs in Shumen. It is planned to build a plant for the production of machinery and spare parts. Other official information about the project is missing, but the direct owner - Sarmakina, is part of the Sarkuysan group, which several years ago built a copper wire plant in the city through another of its companies - Sark Bulgaria. Sarmakina itself is engaged in the design and production of solutions for the cable industry, and its entry into the country is probably related to the activities of Sark Bulgaria, which last year launched a project to expand its production capacity.

14. Organic Growth

Sector: Food Industry

Company: Smart Organic

Location: Sofia

Investment: 16 million levs

New jobs: 30

The producer of organic desserts and other organic foods Smart Organic has built a new plant in the state-owned industrial park in Bozhurishte. This will allow the company to increase its sales from about 80 million levs to 300 million levs annually. The land is 12 thousand sq m, for which Smart Organic paid about 1.3 million levs to the National Company Industrial Zone, and the production and storage premises are located on 6 thousand sq m. However, the lack of electricity delayed the launch of production. In the meantime, the company successfully raised additional capital on the stock exchange amounting to 19.6 million levs, and the funds will be invested in another factory and equipment.

15. Quiet expansion

Sector: Mechanical engineering

Company: SKF Bearings Bulgaria

Location: Sopot and village of Karnare, Karlovsko

Investment: 14.4 million levs

New jobs: n/a

The Sopot-based manufacturer of bearings for the automotive and mechanical engineering industries will invest 14.4 million levs in purchasing and installing a new roller bearing assembly line in Sopot, as well as additional equipment for the production of bearing rings at the secondary base in the village of Karnare, Karlovsko. This is clear from the issued certificate for a class A investor, but the company does not provide additional information. For 2023, the company, which is part of the Swedish international group SKF, recorded a 21% drop in sales to 162 million levs, but profit increased by about a million to 4.6 million levs.

Foreign investment in Bulgaria dropped by 65% in the first ten months of 2024, according to data from the Bulgarian National Bank, reaching only 1.24 billion euro. This happened against the backdrop of already weak investment activity in the previous 2023. Therefore, it is not surprising that the 15 largest announced new production projects, which Capital traditionally follows, have also shrunk to just over 1 billion levs.

In comparison, in the previous year, planned investments totaled an impressive 4.4 billion levs, although half of the amount came from the plans of the Belgian ABEE to build three bases in Bulgaria for recycling and production of batteries for electric vehicles - a project that has yet to materialize, if it starts at all.

By using this site you agree to the use of cookies to improve the experience, customize content and ads, and analyze traffic. See our cookie policy and privacy policy. OK